Alert | Vietnam Cracks Down! Scrutinizes Certificates of Origin and Transit Trade
“Vietnam's Ministry of Industry and Trade recently convened an emergency seminar in Hanoi, announcing plans to accelerate the development of "Made in Vietnam" certification standards for the domestic market.Combating Counterfeit Domestically Made Products.”
Vietnam's Ministry of Industry and Trade recently convened an emergency seminar in Hanoi, announcing plans to accelerate the development of "Made in Vietnam" certification standards for the domestic market.Combating Counterfeit Domestically Made Products.
The move aims to address gaps in current regulations, standardize origin labeling for domestic goods, and crack down on the malpractice of foreign goods masquerading as local products.
Nguyễn Anh Sơn, Director of the Foreign Trade Agency under Vietnam’s Ministry of Industry and Trade, stated that current Vietnamese laws only regulate rules of origin for import-export goods, while the "Made in Vietnam" label for domestic market circulation lacks unified standards. This legal loophole has led to widespread market irregularities.
The ministry’s action reportedly stems from the growing problem of "fraudulent origin misrepresentation" in the domestic market. Many foreign enterprises label goods as "Made in Vietnam" after minimal assembly or rebranding within Vietnam, exploiting consumers’ patriotic sentiment for undue profit. This not only harms consumer rights but also creates unfair competition for businesses genuinely investing in local production. In 2023, the Vietnam Textile and Apparel Association (VITAS) flagged multiple cases of Chinese garments being transshipped to the EU and U.S. via Vietnam, underscoring the urgency of origin oversight.
At a recent emergency seminar in Hanoi, representatives from Vietnamese ministries, industry associations, and enterprises agreed that new standards must balance clarity and practicality. They must both accurately define the essence of "Made in Vietnam" and avoid imposing unnecessary compliance costs. Officials revealed that the rules may reference export origin criteria, requiring a minimum percentage of value added in Vietnam, though specifics remain under discussion.
Implications for Chinese Enterprises
Compliance Challenges: Chinese manufacturers in Vietnam must reassess production processes to meet upcoming localization requirements.
Stricter Transit Checks: Goods transshipped through Vietnam to third countries may face enhanced origin verification.
Supply Chain Opportunities: Chinese raw material suppliers compliant with new standards could gain orders as Vietnamese producers source more certified materials.
Market Context
Vietnam's consumer market reached US$60 billion in H1 2024, with ~30% of goods labeled "Made in Vietnam". New rules are expected to first apply to electronics, textiles, and food/beverages, with a 6–12 month transition period.
Expert Advice for Chinese Businesses
Audit raw material sourcing and processing workflows proactively.Mitigate "origin laundering" risks to avoid trade blacklists.Adapt to Southeast Asia’s broader trend of supply chain autonomy.Vietnam Tightens Scrutiny on Transit Trade and Certificates of Origin.
Enhanced U.S.-Bound Export Controls
A July 3 directive from Vietnam’s Ministry of Industry and Trade mandates stricter inspections of U.S.-bound exports, targeting:Goods with falsified Vietnamese origin Chinese products affected by EU/U.S. trade protection measures.
Trump’s Tariff Impact
On July 2, Donald Trump announced a staged tariff agreement with Vietnam:20% tariff on Vietnamese-origin exports to the U.S.40% tariff on goods deemed transshipped through Vietnam.This will heavily impact Vietnamese exports using Chinese/foreign components.
Unresolved Definitions
The White House has not yet released details, leaving unclear:How "illegal transshipment" will be defined Thresholds for acceptable raw material/added-value ratios.
Vietnam's Origin Threshold
Current rules require ≥30% local value addition or specific processing standards for "Made in Vietnam" labeling.
2025 Policy Direction
Vietnam plans to implement a gradient tariff system to strictly differentiate duty benefits based on localization ratios, discouraging low-value-added "import-and-assemble" models.
